RICS DRS fee
RICS dispute resolution fee
25/Feb/2011 12:45
RICS dispute resolution application fee
With effect from 4 January 2011, the application fee payable to the RICS is £369.00 (inclusive of VAT at 20%)
Previously:
2000 April - £275 inclusive of VAT
2002 August - £300 inclusive of VAT
2006 June - £320 inclusive of VAT
2008 April - £340.00 inclusive VAT
2009 April 15 - £333 inclusive of VAT (15%)
2009 June 15 - £353 inclusive of VAT
2010 to 3 January 2011 - £361.00 inclusive of VAT (17.5%)
2011 January 4 - £369 inclusive of VAT (20%)
With effect from 4 January 2011, the application fee payable to the RICS is £369.00 (inclusive of VAT at 20%)
Previously:
2000 April - £275 inclusive of VAT
2002 August - £300 inclusive of VAT
2006 June - £320 inclusive of VAT
2008 April - £340.00 inclusive VAT
2009 April 15 - £333 inclusive of VAT (15%)
2009 June 15 - £353 inclusive of VAT
2010 to 3 January 2011 - £361.00 inclusive of VAT (17.5%)
2011 January 4 - £369 inclusive of VAT (20%)
Dispute resolution costs and fees
27/Oct/2009 09:18
Dispute resolution costs and fees
In my opinion, and I'm not alone, the fees required and charged by surveyors appointed by the RICS to act as arbitrators or independent experts are often out of touch with reality and, in many instances, obscene.
For example, I am dealing with two matters at present, for different clients, where the rents are likely to end up at around £14,500 pa. In each case, the independent expert wants to charge around £250-£300 an hour, with a minimum fee of £3500 + disbursements and VAT. Now if the agency side of the firms of which those experts are partners were instructed to let the property then chances are the commission would be 10% of the first year's rent (ignoring any rent-free) subject to a minimum commission of £2000 plus VAT.
In another case, the appointed independent expert's hourly rate is £200 an hour + disbursements and VAT. Okay, maybe that's par for the course (or at least it used to be), but the surveyor has run up a bill of almost £1000 + VAT, etc just on dealing with preliminary communications. Also, at a different office of same company, where another person has been appointed, the charge is (only) £175 an hour which, considering it's the same administrative structure, suggests to me some sort of target approach to revenue.
I don't know where such people think the money comes from to pay their fees but frankly if that's the way they carry on then it's hardly surprising so many surveyors are experiencing financial difficulties and having to lay off staff, etc.
It's always been the case that where the parties have no choice the adviser will charge as much as they possibly can. You get that with legal costs and surveyor's fees in connection with tenant applications for licences to assign, sub-let, do alterations, and with schedules of dilapidations. I think the same principle is being applied at review referrals. Once appointed, the surveyor has a general duty to proceed and although that can be stopped by agreement what the parties have little or no control over is how much the surveyor will charge.
Personally, and I've said this all along, I think there should be a fixed fee, possibly on a sliding scale according to the level of passing rent, (with adjustment if the passing rent is a ground rent, for example), for independent expert determinations and arbitrator awards at rent review. The old argument it's impossible to know what will be involved doesn't hold water. When I take on a rent review for a client, I don't have the luxury of being able to charge whatever I like: I quote a fee at the start and no matter how long the job takes or what's involved, I stick to what has been agreed and no more.
An open-ended 'blank cheque' approach exposes both landlord and tenant to the risk of having to pay a disproportionate amount to a third party, which let's face it, particularly with an independent expert, expects most of the job done for them.
The advantage of a fixed fee is that you know where you are the start. You can tell the client it would cost 'x' to go to referral and that would be it. At present, I can only estimate and having to say that the total costs could be in the region of £3000-£5000 + VAT, etc is a really frightening figure for most people, even if their share would only amount to half of that.
Under the existing system whereby surveyors can charge whatever they like, I think landlords and tenants are being taken for a ride.
PS - I am in the process of setting up a low cost dispute resolution service where, for example, I am likely to charge in the region of £1750 + VAT for expert determination and maybe the same for arbitration. The full fee would, of course, not be payable in the event the matter were settled beforehand.
In my opinion, and I'm not alone, the fees required and charged by surveyors appointed by the RICS to act as arbitrators or independent experts are often out of touch with reality and, in many instances, obscene.
For example, I am dealing with two matters at present, for different clients, where the rents are likely to end up at around £14,500 pa. In each case, the independent expert wants to charge around £250-£300 an hour, with a minimum fee of £3500 + disbursements and VAT. Now if the agency side of the firms of which those experts are partners were instructed to let the property then chances are the commission would be 10% of the first year's rent (ignoring any rent-free) subject to a minimum commission of £2000 plus VAT.
In another case, the appointed independent expert's hourly rate is £200 an hour + disbursements and VAT. Okay, maybe that's par for the course (or at least it used to be), but the surveyor has run up a bill of almost £1000 + VAT, etc just on dealing with preliminary communications. Also, at a different office of same company, where another person has been appointed, the charge is (only) £175 an hour which, considering it's the same administrative structure, suggests to me some sort of target approach to revenue.
I don't know where such people think the money comes from to pay their fees but frankly if that's the way they carry on then it's hardly surprising so many surveyors are experiencing financial difficulties and having to lay off staff, etc.
It's always been the case that where the parties have no choice the adviser will charge as much as they possibly can. You get that with legal costs and surveyor's fees in connection with tenant applications for licences to assign, sub-let, do alterations, and with schedules of dilapidations. I think the same principle is being applied at review referrals. Once appointed, the surveyor has a general duty to proceed and although that can be stopped by agreement what the parties have little or no control over is how much the surveyor will charge.
Personally, and I've said this all along, I think there should be a fixed fee, possibly on a sliding scale according to the level of passing rent, (with adjustment if the passing rent is a ground rent, for example), for independent expert determinations and arbitrator awards at rent review. The old argument it's impossible to know what will be involved doesn't hold water. When I take on a rent review for a client, I don't have the luxury of being able to charge whatever I like: I quote a fee at the start and no matter how long the job takes or what's involved, I stick to what has been agreed and no more.
An open-ended 'blank cheque' approach exposes both landlord and tenant to the risk of having to pay a disproportionate amount to a third party, which let's face it, particularly with an independent expert, expects most of the job done for them.
The advantage of a fixed fee is that you know where you are the start. You can tell the client it would cost 'x' to go to referral and that would be it. At present, I can only estimate and having to say that the total costs could be in the region of £3000-£5000 + VAT, etc is a really frightening figure for most people, even if their share would only amount to half of that.
Under the existing system whereby surveyors can charge whatever they like, I think landlords and tenants are being taken for a ride.
PS - I am in the process of setting up a low cost dispute resolution service where, for example, I am likely to charge in the region of £1750 + VAT for expert determination and maybe the same for arbitration. The full fee would, of course, not be payable in the event the matter were settled beforehand.